Fourth District, Division 3 Finds No Contractual Basis For Award, But Does Find a Statutory Basis.
In an interesting first impression issue, the Fourth District, Division 3—in Renezeder v. Emerald Bay Community Assn., Case Nos. G040657 & G041353 (4th Dist., Div. 3 Feb. 8, 2010) (unpublished)—determined that winning interveners in a CC&R dispute are entitled to prevailing party fees under Civil Code section 1354.
Plaintiff homeowners lost a CC&R interpretation dispute with both the HOA and interveners (adjacent or nearby homeowners) over a CC&R prohibiting the splitting of lots. Although attorney’s fees were awarded to HOA, the trial court denied fees to interveners. Result: reversal and remand on the interveners’ fee appeal.
On appeal, Justice Ikola, on behalf of a 3-0 panel, found that the CC&Rs did not authorize a fee award based on language limiting fee recovery to the Association or prevailing homeowners. (Nothing allowed recovery in a member versus member dispute.) However, that took the appellate panel to Civil Code section 1354(c), a mandatory fee-shifting provision favoring “the prevailing party” in CC&R enforcement actions. This statutory hook was a proper anchor for fee awards to interveners. “Section 1354, subdivision (c), does not explicitly mention interveners as possible beneficiaries of the attorney fees rule. But by virtue of their intervention in the action, interveners became parties.” (Slip Opn., p. 20.) Given that interveners had a real stake (win or lose) in the litigation, they were entitled to fees upon remand—however, only fees for nonduplicative work of a reasonable nature.